6 Pitfalls Employee Councils Fall Into

March 10, 2013

Properly constituted Employee Councils are good for employee owned businesses. The collective voice of employees can be more representative, and louder, than having one or two elected positions within the company’s governance structure. However, in my 13 years in the sector, I’ve seen some common pitfalls that Employee Councils should strive to avoid..

1. Expected to solve issues over which they have no control The council is sometimes seen as the place to go to when an employee has some kind of work issue, for example, a problem with their workload. However, a voluntary elected council rarely has the ability to resolve that kind of issue. In an employee owned company, any employee should feel able to address any concern they have directly with the individual who can give the answer to that concern. It may not be the desired answer, but it is much better to have a direct answer.

2. Given the tasks no-one else wants to do There are few things more disheartening than working with a council which then receives an approach from the management team that it’s been decided that it’s the council’s role to organise the Christmas party, or some other task that usually falls to one or two beleaguered individuals. Resist! Does that fit with the constitution? Does the council have the will and the resources for event management?

3. Absolve management of the responsibility of communication Employee owned businesses thrive on communication. As long as it’s all correct then the more the merrier. I’ve seen some companies where managers have thought it the job of the council to communicate changes in policy (especially unpopular changes!). Good and bad news is always more effectively communicated if employees work together to determine the best way to get information out to all the employee owners.

4. Not given the proper authority to be taken seriously in the business Employee Councils work best where senior management recognise the value and purpose of the council, and are seen as actively supporting it. In companies where the council is not respected as the voice of employees, for example where managers make it difficult for employees to attend council meetings, then the council, and therefore employee ownership, is not likely to be successful.

5. Become a talking shop Council meetings are like any other business meeting; there has to be an agenda and someone has to take on the responsibility of ensuring that the agenda is followed, no one member dominates the meeting, and that the meeting achieves its objectives. Some councils find it more effective to have a permanent Chair, some find that rotating the chair keeps people involved and the meetings fresh.

6. Apathy! This is the most dangerous pitfall of all. If employees aren’t enthused enough to stand for election or to vote, and council members “forget” to turn up, then it’s likely time to rethink the purpose and start again.

What can be done to a avoid these pitfalls? Being clear from the beginning on the purpose of the council – What’s it for? – is a start. So many companies form a council because “it’s the thing to do”, or it’s “how John Lewis do it”. Communicate this purpose so that everyone in the business understands it, and refer to that purpose often during discussions. Vocal support from the Chief Executive helps focus people’s attention on the value of the council. And of course, if it “does what it says on the tin” then that value will become obvious to all.

A well functioning council can be the best way to ensure employee owners are truly involved in the business. Invest time in getting it right, and ensuring the Employee Council stays on track.

September 14, 2015 at 8:12 am by Andrea Malyon

Some really good observations here. My company is in the very early stages of setting up an Employee Council and I believe the most important comment from the list is to be clear about the purpose of the council and communicate it clearly and widely and stick to the purpose.

I have no hesitation in recommending Carole to any business considering employee ownership. She will provide a clear understanding of what's involved and the factors to consider

Adrian Grant, Managing Director, The TAS Partnership

Carole has an in-depth understanding of our business and has been invaluable in helping us get to where we are. She has won the trust and respect of our employee owners, and we see her as one of our team

Fred Bowden, MD, Woollard & Henry Ltd

I do not believe we would be in such a strong place as an employee owned company if we had not had the opportunity to utilise her knowledge, experience and commitment

Stephen Pennington, Highland Home Carers

Her obvious enthusiasm for the employee owned business model and the benefits it provides, plus her technical knowledge are important factors in the continued development of an ownership culture within our business